Bringing an L.A. vibe, new SLS Hotel opens on South Beach

In the early days of the economic slump, Sam Nazarian stood at a crossroads and considered the future.

Those roads were Collins Avenue and 17th Street in Miami Beach. And, in mid-2008, the future looked bleak for the old Ritz Plaza hotel that Los Angeles-based entrepreneur Nazarian and his family had purchased four years earlier.

“There were a lot of people that actually advised me to walk away,” said Nazarian, founder, chairman and CEO of the hospitality, real estate and entertainment company sbe. “In 2008, when every crane had stopped, everyone was saying: ‘Listen, Miami’s not coming back.’”

But following years of back-and-forth with a historic preservation board, an infusion of new investor cash, successful construction financing, a resurgence in Miami’s tourism business and the growth of sbe to include multiple restaurants and clubs, Nazarian and his team see better things in store.

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“It’s not just like having a baby, but it’s like trying for a baby for seven years and now you’re having the baby,” Nazarian said.

SLS Hotel South Beach, a mix of Art Deco glamour and California cool at 1701 Collins Ave., opens to the public Thursday boasting 140 rooms, two high-profile restaurants, two celebrity designers, a pair of pools — and a giant version of a rubber duck.

“I’m always a little bit jaded about hotel openings but I’m genuinely truly, truly excited about this one,” said Juliana Shallcross, L.A.-based managing editor of hotel review and news site HotelChatter.com. “I can’t wait to see what they do with it because they have so much going on in one property.”

Including the initial purchase price, the cost of the project is $80-$85 million, Nazarian said. His family owns the property with CIM Group.

While South Beach will be just the second SLS hotel after Beverly Hills, one in New York is slated to open in 2013, and a Las Vegas property is set to follow in 2014. Apart from the SLS hotel, the company has Hyde Lounge clubs in California and Las Vegas; one is also planned for AmericanAirlines Arena in Miami. This will be the second location for The Bazaar by James Beard award-winning chef José Andrés and the eighth Katsuya, from sushi chef Katsuya Uechi; both are sbe brands.

Designed by Philippe Starck of Delano fame, the South Beach hotel is all over the whimsical map: Outside, tiles are placed to look like casually tossed throw rugs. The reception area is summer camp-chic, with a rustic oak check-in desk, a light fixture made of a wooden kayak and framed camp photos on the wall. A giant octopus-looking chandelier made of shells dominates one of the restaurants. Cozy rooms have a French feel, with white sofas, wall coverings that look like pencil sketches and pops of pale pink.

Musician, actor and designer Lenny Kravitz, who has his own design firm, created a bungalow and penthouse suite for the property.

The hotel includes the original 1939 building by architect L. Murray Dixon as well as an additional building in the back, which houses 10 villas, the Hyde Beach lounge and six bungalows. Hotel guests have their own pool, and Hyde Beach — with access for non-guests — sits closer to the beach.

Shallcross said the one question mark for the hotel will be the rooms, which are fairly small even by South Beach standards. Rates for opening weekend start at $375 a night, though a small discount is available for paying with an American Express card.

“Are they going to be comfortable?” she said. “It could end up being a hotel that’s known more for what’s happening at the hotel rather than relaxing in the hotel room. In a city like Miami where partying is a priority, that may not mean much.”

Nazarian said the company has spent more than a year talking to influential Miami Beach residents about what they want to see at the property and used that feedback to craft the final product. Great food and top-notch service — both major focus points for the new hotel — were two big items on locals’ wish lists.

“That, I hope, will bring the loyalty from the local community,” he said. “That’s how we enter markets is we really ask the markets.”

Arash Azarbarzin, president of sbe Hotel Group, said in an interview that the time seems right for the hotel to make its debut.

“We feel really, really good and the demand we’ve had for events, for rooms, for groups is overwhelming,” he said. “We’re fortunate to open at a great time and hopefully bring something refreshing and a little bit different to the beach.”

Azarbarzin said the hotel will draw from the Northeast, Latin America and Europe, but also seek out new clientele from people in Southern California who are familiar with SLS from the hotel in Beverly Hills.

“Hopefully, we’ll create some new demand here and create some new presence and bring more people to South Beach,” he said.

Azarbarzin said he doesn’t expect the hotel, with its relatively small size, to take a huge amount of business from any one competitor.

Gregory Rumpel is managing director of the brokerage Jones Lang LaSalle Hotels in Miami, which worked on the property’s $65 million recapitalization. He said the new hotel provides a perfect bookend to the Delano, which sits on the other side of 17th Street. He believes Nazarian’s expertise — he has also appeared as himself in reality and fictional television shows and has creds in the film industry — will help the hotel stand out as an “entertainment hub.”